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SWFI First Read, September 28, 2018

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UPenn Endowment Returns 12.9% for the Latest FY

The University of Pennsylvania’s endowment returned 12.9% for the June 30, 2018 fiscal year. The endowment has US$ 13.8 billion in assets. The endowment defeated its benchmark by 170 basis points.

New Zealand Superannuation Fund Returns 12.43% for the Latest FY

The New Zealand Superannuation Fund finished the June 2017-2018 financial year at NZ$ 39 billion, up NZ$ 4 billion during a year which was notable for the resumption of contributions to the Fund in December 2017, after an eight year suspension. The fund returned 12.43% (after costs, before NZ tax) for the period.

Mubadala Eyes Debt Restructuring

Mubadala Investment Company is working on bond transaction with a number of banks including Bank of America Merrill Lynch. The planned action could involve a restructuring of Mubadala’s outstanding debt.

Federal Reserve Raises Rates for the Third Time in 2018

On September 26, 2018, the U.S. Federal Reserve raised interest rates for the third time in 2018. The Federal Reserve is moving faster than most central banks and the move supports the U.S. dollars relative strength. The Federal Reserve increased its target for its benchmark lending rate to a range of 2% to 2.25%.

GIC and Vikram Pandit Invest Capital into JM Financial Credit Solutions

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BlackRock Experiences Outflows Among Institutional Investors

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Is BlackRock at peak earnings? BlackRock disclosed its third quarter 2018 results showing a growth of assets under management at US$ 6.4441 trillion at the end of September 2018 versus US$ 5.976892 trillion at September 2017. However, a large portion of the AUM growth has been in the ETF business, iShares, which tends to be very low in fees. The iShares business saw an inflow of US$ 33.7 billion for the quarter.

For the third quarter, BlackRock experienced US$ 24.8 billion in institutional investor outflows, with US$ 23.6 billion being on the index side, while US$ 1.2 billion being on the active side. Institutional investors such as pensions, insurers, and hedge funds withdrew from passive equity strategies. BlackRock saw US$ 4.745 billion in outflows in active equity on the institutional side, but seeing inflows of US$ 2.471 billion in multi-asset institutional and inflows of US$ 1.468 billion in alternatives institutional.

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GIC Buys Large Stake in Nordic Aviation Capital

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Singapore’s GIC Private Limited, a yield-hungry sovereign investor, invested in Denmark-based Nordic Aviation Capital A/S, becoming a significant minority shareholder. Other shareholders in Nordic Aviation Capital include EQT VI Limited fund, KIRKBI Invest (wealth origins tied to Legos), and Martin Møller, the founder of Nordic Aviation Capital. EQT VI will remain the largest shareholder of Nordic Aviation Capital. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Trump Wants Pharma Companies to Disclose Drug Prices in Advertisements

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U.S. President Trump is progressing on plans to mandate pharmaceutical companies to reveal their prices in drug advertisements. “The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay,” Health and Human Services Secretary Alex Azar said in a statement. “So while the pharmaceutical industry’s action today is a small step in the right direction, we will go further.”

The U.S. Health and Human Services Department would require pharmaceutical companies to include drugs’ sticker prices in their video advertisements. This would be similar to how drug companies disclose the laundry list of side effects.

Increasingly, sovereign funds like Temasek Holdings have backed mid-stage pharmaceutical companies and other therapies, while market investors like Norway’s GPFG have large holdings in listed pharmaceutical companies.

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